Unlock Tax-Free Cash with a Home Reversion Plan

What is a Home Reversion Plan?

A home reversion plan is a type of equity release that allows homeowners aged 60+ to access the wealth tied up in their property without needing to move. You can sell part or all of your home to a home reversion provider and, in return, receive either a cash lump sum or regular payments.

You’ll continue living in your home rent-free for life or until you move into long-term care. This can be an ideal option if you need extra funds but don’t want to downsize.

There are no restrictions on how you use the money. You might choose to:

• Help family members get onto the property ladder
• Fund home improvements or adaptations
• Enjoy a once-in-a-lifetime holiday
• Supplement your retirement income

Considering alternatives? A lifetime mortgage is another popular equity release option for over-55s. It allows you to borrow against your property’s value, with the loan repaid when the home is sold.

No Rent, No Loan Repayments, No Interest

With a home reversion plan, you’re granted a lifetime lease, ensuring you can stay in your home rent-free for life. There are no loan repayments or interest charges—just a straightforward sale agreement.

How Does a Home Reversion Plan Work?

Home reversion allows you to release tax-free funds in three ways:

• A lump sum
• Regular payments
• A combination of both

Unlike a lifetime mortgage, you are not taking out a loan. Instead, you sell a share of your property—or all of it—at a discounted price. The provider then receives their share of the proceeds when the property is eventually sold.

If you only sell a portion of your home, the remaining share can be passed on as inheritance. The value your beneficiaries receive will depend on the home’s market price at the time of sale.

Want flexibility? Home reversion plans are portable, meaning you may still be able to move home in the future if needed.

How Much Could You Receive?

The amount you can release depends on:

• Your age (the older you are, the more you can access)
• Your health and lifestyle
• Your property’s value and condition

It’s important to note that the money you receive will be less than your home’s full market value—typically 30–60%. This is because:

• You continue to live in the home rent-free
• The provider doesn’t earn interest, unlike a mortgage lender
• They won’t recover their funds until the home is sold

If you are older, you may qualify for a higher percentage of your home’s value. In some cases, home reversion can allow you to access more funds than a lifetime mortgage.

Who is Eligible for a Home Reversion Plan?

Each provider has its own criteria, but you typically need to:

• Be aged 60 or over (home reversion is often better suited for those 70+)
• Own a UK property worth at least £100,000
• Have a property in good condition

If you’re unsure whether home reversion is right for you, an equity release adviser can help assess your eligibility.

Home Reversion Example

A 70-year-old couple wants to boost their retirement income while staying in their home. They decide to sell 75% of their property to a home reversion provider in exchange for a tax-free cash lump sum.

When the home is eventually sold, the provider takes 75% of the sale price, and the remaining 25% goes to their family as an inheritance.

This allows them to access funds now while still leaving something behind for their loved ones.

What’s the Difference Between a Lifetime Mortgage and Home Reversion?

Both are forms of equity release, but they work differently:

• Lifetime Mortgage – A loan secured against your home. You keep full ownership, and the loan plus interest is repaid when the home is sold.
• Home Reversion Plan – You sell part or all of your home in exchange for a lump sum or income. There’s no loan or interest, but you give up full ownership of the share you sell.

Home reversion plans are now less common than lifetime mortgages but may suit some homeowners, especially those looking to access the maximum possible amount from their property.

How Are Home Reversion Plans Regulated?

Home reversion plans are regulated by the Financial Conduct Authority (FCA), ensuring they meet strict industry standards.

Who is the Equity Release Council?

The Equity Release Council is an industry body that promotes safe and ethical equity release. 

What Costs Are Involved?

Advisers typically offer free initial consultations, but if you proceed, fees may include:

• Valuation fees
• Legal and solicitor fees
• Application fees

Your adviser will provide a clear breakdown of all costs before you commit.

FAQ’s

Will I Still Need to Maintain My Property?

Yes. Even after selling a portion of your home, you’ll still be responsible for its upkeep and maintenance to keep it in good condition for future sale.

Are Home Reversion Plans Available Across the UK?

Yes, home reversion plans are available in England, Scotland, Wales, and Northern Ireland.

What Are the Risks of a Home Reversion Plan?

Home reversion isn’t for everyone, so it’s important to understand the potential downsides:

• You’ll receive less than the market value of your home’s share.
• Your family’s inheritance will be reduced—or eliminated if you sell 100% of the property.
• If you pass away soon after taking out the plan, your estate may lose significant value.
• It’s difficult to reverse—if you want to buy back your share, you’ll need to pay full market value.
• Means-tested benefits could be affected, depending on how much cash you receive.

A specialist equity release adviser will explain all risks before you make any decisions.

Is Home Reversion Right for You?

Home reversion can be a useful option if you:

• Want to release more cash than a lifetime mortgage allows
• Don’t mind selling part of your home
• Prefer not to have a loan or interest repayments
• Are aged 70+ and looking for the best value from your property

However, if you’d rather retain full homeownership, a lifetime mortgage may be a better fit.